Martin Lewis explained what the conflict between Russia and Ukraine could mean for the cost of electricity bills for households in the UK.
Russian troops entered Ukraine on Thursday (February 24), launching a “full-scale invasion” of the capital Kiev, with explosions and rockets wreaking havoc throughout the city.
The conflict is expected to have an impact on economies around the world and there are fears that fuel and energy prices in the UK could rise sharply as a result.
Fuel prices are forecast to rise as the cost is linked to Brent crude, which surged to more than $100 (£74.29) a barrel when Russia invaded Ukraine.
For the first time since 2014, Brent oil is worth more than $100 per barrel.
Energy costs are also expected to rise as Europe gets about 40% of its natural gas from Russia.
What did Martin Lewis say?
Martin Lewis raised concerns about rising electricity bills on his ITV Money Show Live on Thursday night.
A concerned viewer asked MoneySavingExpert if it would be better to switch to a fixed electricity bill in light of the 40% increase in gas prices.
The viewer, known only as Mike, said: “I watch the show every week and I know [of] Council on the supply of energy resources to do nothing, BUT because of the situation in Ukraine today, the price of gas has increased by 40%. Would it make sense to fix it now?”
Mr. Lewis said it would be “a gamble” because no one can be sure how energy prices will fluctuate this year.
In response, Martin said that it would be “a gamble” because no one can be sure how energy prices will fluctuate this year.
He warned that another 50% increase in the price cap could occur in the UK, bringing the average electricity bill to £3,000 a year in October, but added it was unclear if the current surge would continue.
He advised people to only consider a fix if they could find a deal within 60% of the current price cap, but warned that it would be a gamble.
He: “This is a terrible situation, first of all, for people in Ukraine, and energy is already secondary.”
“Energy prices have jumped sharply today and if they stay at this level we will see another 50% increase in the price cap in October, bringing the average bill to £3,000 a year.
“But we don’t know if this surge will continue.
“I have already said that if you can find a solution within 60% of the current price limit, it is worth it.
“The back of the envelope is probably 80% right now if you want peace of mind.
“Ultimately, until April we have a cheap rate, since April we have a cheaper rate than any corrections – so this is a gamble.
“I don’t know and can’t give you the right answer.”
When will the price cap go up?
Electricity bills will increase by £693 a year for millions of households from the start of April.
Ofgem raised the cap on bills to £1971 or 54% after gas prices soared to an all-time high.
For customers with prepaid meters, the price cap will rise by £708 through £2017, the regulator said.
This increase will affect 22 million households across the UK and will affect those using their energy supplier’s default tariff.
The price cap had already been set at a record high in October, before the market experienced its biggest jump in gas prices.
It is based on wholesale electricity prices and supplier costs, which have skyrocketed in recent months, meaning consumers are now facing hefty gas and electricity bills.
Wholesale gas prices have risen by 250% since January and rose by 70% in August alone.
This increase was driven by a cold winter in Europe last year, meaning gas is used up faster, putting pressure on global supplies.